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A machine that costs $280,000 would be depreciated using the straightline method by a leasing firm...

A machine that costs $280,000 would be depreciated using the straightline method by a leasing firm over a period of 3 years. Both the book value and the market value would be zero at the end of the 3 years. Both the lessor and the lessee have a tax rate of 21 percent. What is the NPV of the lease relative to the purchase to the lessor if the applicable pretax cost of borrowing is 7 percent and the lease payments are set at $102,100 annually for 3 years?

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